A cost function is a mathematical description of how a cost changes with changes in the level of an activity relating to that cost.

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A cost function is indeed a mathematical representation of how costs change in response to changes in the level of an activity related to that cost. The activity can be anything that has an impact on costs, such as production volume, the number of units sold, or the level of advertising expenditure. Cost functions are used to help businesses understand the relationship between costs and activity levels, which can then be used to make better decisions about pricing, production, and resource allocation.

A Cost Function Is a Mathematical Description of How a Cost